Marketing Science
Опубликовано на портале: 29-09-2003
Ram C. Rao
Marketing Science.
1990.
Vol. 9.
No. 4.
P. 319-342.
This paper considers the question of how a sales manager should design the optimal
compensation scheme for his salesforce when it consists of salespersons of varying
selling skills, i.e., when the salesforce is heterogeneous. The manager's problem
is to reward the salespersons based on observable, uncertain sales achieved by the
salespersons. Under the assumption that both the manager and the salespersons are
risk neutral, the optimal compensation scheme is derived. It consists of the manager
offering a menu of plans, consisting of a quota, a payment for meeting quota, and
a constant commission rate for sales above or below quota. Such schemes using constant
commission rates are also called menus of linear plans. Salespersons choose the quota
which best suits them, achieve sales, and are then rewarded based on their actual
performance. This scheme, variants of which are often observed in practice, is shown
to be optimal for sales environments characterized by commonly encountered sales
response functions, and a large class of frequency distributions of selling skills
in the salesforce. The problem is solved using the methods of principal-agent models.
The key differences in managing homogeneous and heterogeneous salesforces are highlighted.
Finally, the paper discusses the issues involved in practically implementing the
optimal compensation scheme.
Опубликовано на портале: 29-09-2003
Rajiv Lal
Marketing Science.
1990.
Vol. 9.
No. 4.
P. 299-319.
In this paper, we explore the role of franchising arrangements in improving coordination
between channel members. In particular we focus on two elements of the franchising
contract, namely, the royalty structure and the monitoring technology. We begin with
a simple analysis where a manufacturer distributes its product through a retailer
and the retail demand is affected by the retail price and the service provided by
the retailer. In this context we show that neither royalty payments nor monitoring
are needed for full coordination. We then extend the model to allow for free riding
by franchisees and show that although monitoring helps affect the behavior of the
franchisees, royalty payments are still unnecessary to coordinate the activities
of the franchisor and the franchisees. Finally, we show that in environments where
factors affecting retail sales are controlled by both the franchisor and the franchisee,
royalty payments provide the necessary incentives for the franchisor while monitoring
systems are used to ensure that franchisees also behave in the best interest of the
channel. Our general results are found to be consistent with those in Brickley and
Dark ( 1987 ) and Norton (1988), who conclude that franchising is affected by principal-agent
problems. Our theory finds special support in the work of Lafontaine ( 1988 ) where
it is concluded that the incidence of franchising is related to cost of monitoring
and the importance of franchisor investments.
Опубликовано на портале: 29-09-2003
Kelvin J. Lancaster
Marketing Science.
1990.
Vol. 9.
No. 3.
P. 189-212.
Demand for variety may arise from a taste for diversity in individual consumption
and/or from diversity in tastes even when each consumer chooses a single variant.
The full degree of variety potentially demanded will not, in general, be supplied
because scale economies (even to a small degree) mean that the potential welfare
or revenue gain from greater variety must be balanced against the lower unit production
costs with fewer variants. The economics of product variety consists essentially
in analysing the effect of this balance in different situations, and comparing the
degree of product variety for different market structures with each other and with
the optimum. The survey commences with the work on market structures with single
product firms (generalized monopolistic competition), tracing modern developments
in both the Chamberlinian and Hotelling traditions. The latter has been particularly
fruitful, due to the expansion of the original locational ideas into virtual spaces
in product characteristics. The emphasis in recent work on product variety has been
on multiproduct firms in both monopolistic and oligopolistic structures, including
strategic market preemption. Although most work has been in a full information context,
there have been advances in product variety under imperfect information (either by
consumers to properties of the firms' products or firms as to consumers' demands).
(Product Differentiation; Product Variety; Monopolistic Competition; Oligopoly)
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